1000 Business Lessons Every Businessman Must Know

Chapter 117 Common sense of contract law that bosses must know (2)
② Different legal consequences.Where a deposit is made, if the party paying the deposit fails to perform the contract, he has no right to request the return of the deposit, and if the party accepting the deposit fails to perform the contract, the deposit shall be doubled.When the advance payment cannot be performed in the contract, the party receiving the advance payment shall return the advance payment and interest in full, regardless of whether the advance payment party breaches the contract or the advance receiver party breaches the contract, and whether the contract is valid or invalid, the advance payment shall be returned, and not double return;
③The scope of application is different.For the deposit, except for several contracts that do not need to be paid according to their nature, other contracts can generally agree to pay the deposit, but there are more restrictions on advance payment, and advance payment is generally not allowed;

④The amount of prepayment also varies.The advance payment can be the total amount of the contract or a part of it, while the advance payment is limited to a certain amount.

In addition, the deposit can be paid before the contract takes effect to prove the establishment of the contract, while the advance payment must be paid to the other party after the contract becomes effective.Therefore, when signing a contract, pay attention to the distinction between advance payment and deposit. If it is a deposit, clearly write down the deposit, and if it is an advance payment, indicate that it is an advance payment. Do not mix them to avoid disputes between the two parties.

962. Issues concerning the method of settlement of contract disputes

Contract disputes can be resolved through negotiation, mediation, arbitration, and litigation. Negotiation or mediation is the first method to be used. When negotiation or mediation fails, arbitration or trial can be used according to the contract. Item 111 of Article 2 of the Civil Procedure Law stipulates: “According to the law, if the two parties voluntarily reach a written arbitration agreement on a contract dispute and apply to an arbitration institution for arbitration, they shall not bring a lawsuit to the people’s court and inform the plaintiff to apply for arbitration to the arbitration institution.”

As to whether contract disputes should be resolved by arbitration or litigation, the parties can agree in the contract that if an arbitration clause is agreed upon, they can only apply for arbitration in the event of a dispute and cannot sue in a court; on the contrary, if an arbitration clause is not agreed, they can sue in a court.Therefore, the agreement of the parties plays a decisive role in whether to submit a contract dispute to arbitration or to a court. Special attention should be paid when signing the contract.

In addition to agreeing on the arbitration clause, the parties must also agree on the jurisdictional court for contract disputes in the contract, that is, the jurisdiction of the agreement.If the two parties have signed an agreement jurisdiction clause, when a dispute arises, the parties can sue in the court selected by both parties according to the contract, without being restricted by the general geographical jurisdiction, that is, the agreement jurisdiction takes precedence, which is very important for preventing contract disputes. Significant.

When entering into the jurisdiction clause of the agreement, the following issues should be paid attention to:

① The court to choose jurisdiction must be a court within the place where the contract is performed, the place where the contract is signed, the place where the defendant is located, the place where the plaintiff is located, and the place where the subject matter is located. Choices beyond this scope are invalid;

② The jurisdiction of the agreement cannot violate the provisions of exclusive jurisdiction and hierarchical jurisdiction;
③ Jurisdiction by agreement should be clear and specific. Uncertain jurisdiction by agreement means that there is no choice. When a dispute arises, jurisdiction should be determined according to statutory jurisdiction.

963. Signing and sealing of contracts and related procedures
When both parties to the contract reach an agreement on the main terms, the contract is established.However, the agreement between the parties to the contract on the main terms of the contract does not make the contract immediately legally effective, and a signature is still required.Stamping, approval, notarization, visa and other procedures.These signing procedures are important links that cannot be ignored, whether they are for the entry into force of the contract, or for the performance of the contract and the handling of contract disputes.

1. Sign and seal the contract

After the terms of the contract are negotiated, the contract must be signed by both parties and affixed with the official seal of the unit before the contract becomes effective.Signature and seal are the legal evidence that the parties fully agree with the meaning of the contract terms. Any contract without signature and seal is not binding on both parties. Any party can propose amendments. Once signed and sealed, the contract becomes legal. potency.Therefore, signature and seal are necessary procedures for signing a written contract.

In practice, you should generally pay attention to the following issues when signing and stamping:

First, before signing and sealing, the contract text should be checked for final review.If there is any unreasonable point found through the review, consult with the other party to revise it in time, and sign and seal after revising.When reviewing the contract text, more opinions should be sought from relevant business executives, and if necessary, submit to the unit's legal counsel or ask a lawyer to review it on its behalf.Business personnel should not be too busy signing and stamping the contract reached through negotiation outside the company. It is best to take it back to the unit and submit it to the legal representative for review before deciding whether to sign and stamp it. This is crucial to prevent being deceived when signing the contract.

Second, the signatory of the contract should be the legal representative and entrusted agent (i.e. the person in charge) of the unit, and the enterprise without legal person qualification shall sign by its representative.In the case of signing a contract on behalf of the agent, the agent should have a power of attorney from the legal representative, or other proof of authorization, otherwise, the legal representative should personally sign it.

Third, the seal of the contract can be the official seal of the unit or the special seal for the contract, but the seal of the internal functional department of the unit cannot be affixed. Only the official seal and the special seal for the contract can be used externally.On the issue of stamping, pay special attention to three points: ① The unit name of the stamped official seal or special contract seal should be exactly the same as the names of the parties to the contract; Borrowing is not allowed. If the contract is signed by borrowing the special contract seal or official seal of other units, the contract is an invalid contract, and the lending unit and the borrower shall be jointly and severally liable for the legal consequences of the invalid contract; For the contract, the method of signing the contract first and then stamping it should be adopted. Do not hand over the blank contract with the official seal to the agent casually. Otherwise, the contract signer will be responsible for the contract signed by the blank contract with the official seal.

2. Notarization and visa of the contract
If both parties to the contract agree in the contract that the contract will not take effect until the notarization or visa procedures are completed, then the notarization or visa procedures are necessary conditions for the contract to become effective.Both parties should go to the notary office to go through the notarization procedures of the contract according to the contract or go to the relevant visa department to go through the contract visa.If the contract has a guarantor, the notarization or visa should be notified and the guarantor should be notified to go with the guarantor. The notarized or visa contract should be in several copies, of which the notarization or visa department keeps one copy, and each party keeps one copy.

3. Contract submitted to relevant authorities for approval

All laws and regulations require the approval of the competent authority to sign a contract, which must be reported for approval before signing, otherwise the signed contract is invalid.

964. What is a void contract?
An invalid contract refers to a contract that has been concluded but has no legal effect due to violation of the effective conditions stipulated by laws and administrative regulations, and is not legally binding.The invalidity of the contract can be divided into two situations: the invalidity of the whole contract and the partial invalidity of the contract.Although the contract is concluded voluntarily by the parties, it must not endanger the national and social public interests. If it endangers the national and social public interests, it is absolutely not allowed, and the state must take the initiative to intervene. Article 52 of the "Contract Law" stipulates that under any of the following circumstances, the contract shall be invalid;

1. One party concludes the contract by means of fraud or coercion, which damages the interests of the state;
2. Maliciously colluding to damage the interests of the state, collective or third party;

3. Cover up illegal purposes in a legal form;
4. Harm the public interest;

5. Violation of mandatory provisions of laws and administrative regulations.

Any contract under any of the above circumstances is invalid.

The invalidity of the contract is divided into the invalidity of the whole contract and the partial invalidity.If part of the contract is invalid, the validity of the other parts will not be affected, and the other parts will remain valid.A void contract is not legally binding from the outset.The invalidity of the contract does not affect the validity of the independent dispute resolution clauses in the contract.The party at fault shall compensate the other party for the losses suffered thereby.

965. What kind of contract can be revoked
According to the Contract Law, the following contracts may be modified or revoked:

1. Concluded due to major misunderstanding
A major mistake refers to a party's misunderstanding of the nature of the contract, the type, quality, and quantity of the other party's subject matter, such as the type, quality, and quantity of the subject matter of the other party.However, misunderstandings about whether economic benefits can be obtained after the conclusion of the contract and the degree of commercial risk are not major misunderstandings.

2. It is obviously unfair at the time of conclusion of the contract

What I'm talking about here is "obviously unfair", not a little bit unfair, and it's obviously unfair "at the time of contracting".There are always risks in engaging in business activities, and it is normal that there are always some gains and some losses.Risks arising during performance do not belong to this scope, and it is necessary to distinguish obvious unfairness from normal risks.

3. One party uses fraud, coercion or taking advantage of the other party's danger to make the other party enter into a contract against its true intention.

A revocable contract is different from an invalid contract. An invalid contract damages the public interest of the country, while a revocable contract is obviously unfair to one party.Therefore, in terms of procedures, consequences, etc., they are not exactly the same.

966. Principles of Contract Performance

The performance of the contract is an extremely important and key issue in the contract law.The reason why the parties want to conclude a contract is to achieve a certain purpose.The conclusion of a contract is very important because the rights and obligations of the parties are to be established, changed, and terminated, but the realization of these rights and obligations can only be achieved through performance.

In order to ensure that the contract can be well performed, the Contract Law has specially made provisions on the performance of the contract.The performance of the contract shall abide by the following principles:
1. Full and proper performance
The parties shall fully perform their obligations in accordance with the agreement, including the subject of the obligation, the subject matter, quantity, quality, price or remuneration, as well as the method, place, and time limit for performance, etc., all must be fully performed in accordance with the contract.

2. Follow the principle of honesty and credit

When signing a contract, we must be honest and trustworthy. When performing contractual obligations, we must also emphasize honesty and trustworthiness.The Contract Law stipulates that the parties shall abide by the principle of good faith, and perform obligations such as notification, assistance, and confidentiality in accordance with the nature, purpose, and transaction practices of the contract.

3. Fair and reasonable to promote the performance of the contract

In order to perform the contract well, we should try our best to be thoughtful and specific when signing the contract. What should we do if some issues are not agreed upon when signing the contract, or the agreement is not clear?The general principle is that remedies should be provided so as not to impede the performance of the contract.First, it is supplemented by agreement between the parties. If no supplementary agreement can be reached, it shall be determined in accordance with the relevant terms of the contract or transaction practices.

967. Contents of sales contract

A sales contract is a contract in which the seller transfers the ownership of the subject matter to the buyer, and the buyer pays the price to the seller.

Generally speaking, a contract shall include the contents stipulated in Article 12, Paragraph 1 of the Contract Law:

(1) The name or full name and address of the party concerned;

(2) Target;
(3) Quantity;
(4) Price or remuneration;
(5) quality;
(6) The time limit, place and method of performance;

(7) Liability for breach of contract;
(8) Methods of resolving disputes.

As far as sales contracts are concerned, Article 131 of the "Contract Law" stipulates: In addition to the provisions of Article 12 of this Law, the contents of a sales contract may also include packaging methods, inspection standards and methods, settlement methods, the words used in the contract, and effectiveness etc.The parties may also make other agreements in the sales contract according to actual needs.

968. The rights and obligations of the parties in the sales contract
The seller is the person who sells the subject matter, transfers the ownership of the subject matter and obtains the currency paid by the counterparty of the contract.In the sales contract, the seller's obligations are:

(1) Deliver the subject matter and transfer the ownership of the subject matter to the counterparty.

A sales contract is an essential contract.As far as the buyer is concerned, the purpose of participating in the sales contract is to obtain the ownership of the subject matter. Therefore, delivering the subject matter and transferring ownership is the most basic obligation of the seller.

(2) Transfer of possession of the subject matter to the buyer.According to different transfer methods, it can be divided into actual delivery and virtual delivery.

Actual delivery means that the seller transfers the factual control of the item sold to the buyer, so that the buyer directly and actually takes possession of the subject matter.If the sale is delivered directly to the buyer.

False delivery refers to the transfer of the possession right of the subject matter to the buyer in place of physical delivery.It can also be divided into simple delivery, index delivery and possession modification.

(3) If the subject matter has accessories, unless otherwise agreed by the parties, they shall be delivered together.Because the value of the accessory is to guarantee the full utility of the main object, as long as there is no contrary agreement, even if the parties come to make a clear agreement on the delivery of the accessory, the accessory must be delivered together with the main object.

(4) Relevant documents and materials other than the documents for picking up the subject matter shall be delivered to the buyer in accordance with the agreement or transaction practice.

The buyer is the person who takes title to the subject matter and pays the seller money.Its rights are correspondingly the obligations of the seller, and its obligations are the rights of the seller.The main obligation of the buyer is to accept the subject matter delivered to it by the seller and pay the price.

969. Issues concerning the establishment of a contract and its entry into force

The establishment of a contract means that the parties to the contract have reached an agreement on the main terms of the contract.The entry into force of a contract means that the established contract has a certain legal binding force between the parties.

The conditions for the formation of the contract are as follows:

(1) There are two or more parties to the contracting subject.The contracting subject is the person who actually concludes the contract, who can be the future contracting party or the agent of the contracting party;

(2) Negotiations on the quantity and other contents of the subject matter of the contract;
(3) There must be two stages of offer and acceptance.

The requirements for the contract to be effective are as follows:

(1) The perpetrator has the corresponding capacity for civil conduct;
(2) The meaning expresses truth;
(3) Do not violate laws and social public interests;
(4) The contract must be in the form required by law.

(End of this chapter)